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A Better Choice for Participants and Their Districts Cooperating School Districts 403(b) and 457(b) Retirement Trust An Educated Difference for Supplemental.

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Presentation on theme: "A Better Choice for Participants and Their Districts Cooperating School Districts 403(b) and 457(b) Retirement Trust An Educated Difference for Supplemental."— Presentation transcript:

1 A Better Choice for Participants and Their Districts Cooperating School Districts 403(b) and 457(b) Retirement Trust An Educated Difference for Supplemental Retirement Savings

2 A Better Choice for Participants and Their Districts What were the Drivers behind the CSD Retirement Trust? 2009 IRS Regulations District Compliance, Administration and Fiduciary Oversight Districts struggled under the traditional “open access model” CSD evaluated the issues and created a “Solution” The “Solution” - The CSD 403(b) & 457(b) Retirement Trust (CSD RT)

3 A Better Choice for Participants and Their Districts What challenges do you face? Multiple Investment providers and offerings Unknown or hard to understand fee structure of the different providers Investment illiquidity due to loads or surrender charges Lack of discipline or oversight of investment choices Costly compliance solution Sales vs. education environment Lack of consistent communication Monitoring non-district personnel in buildings

4 A Better Choice for Participants and Their Districts Improves retirement outcomes for Participants by: Lowering fees and making them transparent: Always strives for the lowest investment share class Providing diversified investment options using a single trading platform for both 403(b) & 457(b) plans Offering actively managed, low-cost passively managed index funds and age-appropriate target date funds Seeking “Best in Class” investments with quarterly monitoring & oversight Providing flexibility with both pre- and post-tax deferral options for both 403(b) and 457(b) Enabling participants to buy time into the PSRS/PEERS with no rollover fees Focusing on education and retirement outcomes, not on sales and marketing, using non- commissioned, licensed Financial Advisors whose compensation is not effected by your investment choice Improving the bottom line for participants by striving to increase their retirement account balances to provide higher income replacement Why the Trust is “A Better Choice” It is a “Best in Class” model that…

5 A Better Choice for Participants and Their Districts Addresses District issues by Solving compliance, including tax compliancy for the District and ultimately for the Participants Being faster and more flexible to incorporate needed plan changes Placing all providers (including current ones) under the Trust’s umbrella for all administration Saving Districts time and money, thereby helping allocate valuable resources to other needs Ensuring consistent plan communications Reducing interruptions and security concerns during the school day Why the Trust is “A Better Choice” It is a “Best in Class” model that…

6 A Better Choice for Participants and Their Districts Since it launched in January 2010, the CSD Retirement Trust:  Through Dec 31, 2013, has provided participants with investment options that have outperformed their peer benchmark in 24 of the 26 investment categories  Decreased investment management fees in 17 of the 24 fund options  Lowered administrative expenses by 36 percent Why the Trust is “A Better Choice” It is a “Best in Class” model that…Performs

7 A Better Choice for Participants and Their Districts Recently released, in early 2011 this study by TIAA CREF, led by expert scholars Robert Clark, professor of economics at North Carolina State University and TIAA-CREF Institute Fellow, and David Richardson, principal research fellow at TIAA-CREF Institute, assesses key components of state 403(b) retirement plan structures to identify the method that is most efficient and cost effective. Who’s Watching the Door? How Using A Single Provider Can Improve K-12 Employee Retirement Outcomes TIAA-CREF examined 403(b) plans in: Arizona, California, Iowa and Texas to determine whether and how different methods of provider control and oversight affect the number of products, investment options and the level of fees that employees pay on their retirement savings accounts. They identified two models. 1) Open access model Access by any willing provider 2) Controlled access model (i.e. using a bidding process to select, manage and oversee a single provider)

8 A Better Choice for Participants and Their Districts So, what did the study conclude? “While there are a number of economic reasons for the disparity in fees based on administrative structure, we conclude that… …controlled access (i.e. a single provider) provides a better model for maximizing the likelihood that employees achieve their retirement goals.” What does that mean? Lower Fees Higher Retirement Balances equals

9 A Better Choice for Participants and Their Districts Total Fees-including full compliance Consortium Pricing No Loads/surrender charges/rollover fees Investment Platform - Open architecture Guaranteed fund or money market 403(b) assets under management Number of public school clients Current presence in CSD member Districts 403(b) plans Average client retention # of 403(b) clients of similar size Advisor-based education model and non- commissioned, licensed Financial Advisors Call center hours Comdex Rating (June 15, 2014) Able to sign hold harmless agreement Assists with universal availability Common remitter function Ready for information sharing agreements Able to record-keep the 457 Offer same investments in 403(b) & 457(b) Provide integrated plan statements Competitively Bid Using Criteria, e.g. The Trust A Single Provider Model

10 A Better Choice for Participants and Their Districts Participant Statement Fees Annual Asset Charge (1/1/10)* VALIC = 0.68% Administration, Recordkeeping, Compliance, Education & Advisors CBIZ = 0.25% Registered Investment Advisor (RIA) CSD = 0.25% Recovery, Marketing Expenses, Management Oversight, Legal, Insurance 1.18% Annual Asset Charge (12/31/13)* VALIC = 0.48% Administration, Recordkeeping, Compliance, Education & Advisors CBIZ = 0.21% Registered Investment Advisor (RIA) CSD’s = 0.25% Recovery, Marketing Expenses, Management Oversight, Legal, Insurance 1.04% Annual Asset Charge (06/30/14)* VALIC = 0.32% Administration, Recordkeeping, Compliance, Education & Advisors CBIZ = 0.19% Registered Investment Advisor (RIA) CSD’s = 0.25% Recovery, Marketing Expenses, Management Oversight, Legal, Insurance 0.76% Fees have decreased over 36% since The Trust’s inception *VALIC, CBIZ and CSD’s asset charge is not applied against assets held in the Fixed Interest Fund *Annual asset charges decline as total plan assets grow and reach pre-determined break-points.

11 A Better Choice for Participants and Their Districts Participant Statement Fees – An Example * VALIC, CBIZ and CSD’s asset charge is not applied against assets held in the Fixed Interest Fund Total Asset Charges decline as total plan assets grow and reach pre-determined break-points. Assumption: $10,000 Mutual Fund Balance Quarterly Fee Annual Asset Charge (06/30/14)* VALIC = 0.32% Administration, Recordkeeping, Compliance, Education & Advisors CBIZ = 0.19% Registered Investment Advisor (RIA), Consulting CSD = 0.25% Recovery, Marketing Expenses, Management Oversight, Legal, Insurance $8.00 $4.75 $6.25 Fees have decreased over 34% since The Trust’s inception (No front or CDSC sales charges, no redemption fees, no mortality & expense fees, no 12(b)(1) fees) Total $19.00

12 A Better Choice for Participants and Their Districts PIMCO Total Return Instl (0.46%) American Funds U.S. Government SEC R6 (0.26%) Short-term/Stable Value Fixed Income Large Cap Value Large Cap Growth Small/Mid Cap Value International/Global VALIC Fixed Interest Vanguard Prime Money Market Inv (0.17%) Vanguard Windsor II Adm. (0.28%) T. Rowe Price Equity Income (0.68%) American Funds Growth Fund of Amer. R6 (0.34%) T. Rowe Price Growth Stock (0.70%) Calvert Social Index I (0.21%) Vanguard Selected Value (0.44%) American Beacon Small Cap Value Inst (0.84%) American Funds EuroPacific Growth R6 (0.50%) American Funds Capital World Growth/Income R6 (0.45%) POTENTIAL RISK/RETURN Higher Lower CSD Investment Lineup (investment management fees shown in parenthesis) Target Date / Balanced Vanguard Target Retirement Income Inv (0.16%) Vanguard Target Retirement Inv (5-yr increments) (0.16% %) American Funds Balanced R6 (0.29%) Small/Mid Cap Growth Vanguard Mid Cap Growth Inv (0.51%) Fidelity Advisor Small Cap Growth I (0.92%) Plus Vanguard Index Signal Funds in the following categories:  Bond (0.10%)  Large Cap Growth (0.10%)  Large Cap Value (0.10%)  S&P 500 (Large Blend) (0.05%)  Mid Cap (0.10%)  Small Cap (0.10%)  Foreign/International (0.14%) Bold % reflect lower management fees since inception Investors should carefully consider the investment objectives, risks, charges and expenses of a fund before investing. This and other information is contained in the fund’s prospectus and should be read carefully before investing. To obtain a prospectus please contact VALIC.

13 A Better Choice for Participants and Their Districts Oversight Roles & Responsibilities Investment Committee Selects, Monitors & Replaces Investments Board of Advisors Representative of each participating District Trustees Elected by the Board of Advisors

14 A Better Choice for Participants and Their Districts Service Providers* CBIZ 3(21) Investment Advisor Marketing Fiduciary Governance Participant Education Fees & Expenses Legal Counsel Plan Document Compliance Amendments VALIC Record-keeper Administration Compliance Regulatory filings Employee education campaigns Financial Advisors deliver Participant & Plan Sponsor websites EdPlus Administration Oversight Marketing Insurance *All service providers/ fees and expenses are subject to CSD RT Board of Advisors oversight and approval.

15 A Better Choice for Participants and Their Districts Bayless Brentwood Clayton CSD Dallas County Elsberry Gasconade Grain Valley Grandview R-II Hazelwood Harrisonville Jennings Liberty Lindbergh Maplewood Richmond Heights Mehlville Meramec Valley Orchard Farm Pattonville Ritenour 30 Participating School Districts (6/30/14) Smithville St. Clair Spring Bluff Special School District Valley Park Warren County R-III Washington Webster Groves Wentzville Wright City Over 3400 Participants and nearly $70 Million in Plan Assets (6/30/14)

16 A Better Choice for Participants and Their Districts Thank you for your interest For additional information, please contact Stephen Keyser, Managing Director CSD Retirement Trust. him at or at Securities and Investment Advisory Services Offered Through CBIZ Financial Solutions, Inc. Member FINRA, SIPC and Registered Investment Adviser Oak Tree Blvd S., Independence, OH (216)


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